CESTAT, AHMEDABAD BENCH
Shri Natraj Ceramic & Chemical Industries Ltd.
Commissioner of Central Excise, Rajkot
ORDER NOS. A/397/WZB/AHD. OF 2012
AND S/504/WZB/AHD. OF 2012
APPLICATION NO. ST/S/965 OF 2011
APPEAL NO. ST/437 OF 2011
MARCH 2, 2012
1. The appellant had paid service tax of Rs. 2,43,116/-, Education Cess and interest thereon amounting to Rs. 2,20,689/- by debit entry in their cenvat account on 13.6.06. This was confirmed and appropriated subsequently in the order-in-original dated 22.9.06. Since the department took objection for the debiting of interest amount in the cenvat account, appellant had debited (sic) the interest amount separately amounting to Rs. 31,934/- on 11.7.06. Thereafter the matter went into litigation and the liability of service tax attained finality with the order of the Tribunal dated 29.5.09. Thereafter the appellant filed a refund claim for the excess amount paid by them and the original adjudicating authority vide order dated 28.10.10 allowed the refund of Rs. 59,299/- by way of credit in the cenvat account. Revenue filed an appeal against this order and in the impugned order the Ld. Commissioner has allowed the appeal filed by the Revenue and rejected the refund claim which has resulted in a situation whereby the appellant is required to pay the amount again. The refund claim has been rejected on the ground that the refund claim was submitted beyond the period of limitation under Section 11B of Central Excise Act, 1944.
2. The Ld. Chartered Accountant on behalf of the appellants submitted that in the cross-objection filed by them when the department filed appeal before the Ld. Commissioner (Appeals) they had specifically stated that the debits in the cenvat account were made under protest and therefore the time limit under Section 11B is not applicable besides pointing out the time limit has to be accounted from the date of order of the Tribunal and not from the date of Order-in-Original. However the appellate authority did not consider the fact that payment was made under protest and did not make any observation with regard to the claim but proceeded to allow the appeal of the Revenue on the ground that the refund claim had been submitted beyond the period of one year from the date of Order-in-Original. Ld. A.R. would reiterate the observations of the Order-in Original.
3. After hearing both the sides for sometime, I find that even though the matter is listed only for hearing the stay application, since the issue involved is limitation under Section 11B only and can be decided at this stage itself, the requirement of pre-deposit is waived and the matter is taken up for final decision with the consent of both the sides.
4. I have considered the submissions made by both the sides. The Ld. Chartered Accountant produced a copy of the letter submitted by them to the Superintendent of Central Excise, Jamnagar on 16.6.06 after debiting the amounts in the cenvat account. In this letter it has been clearly stated that the amount is debited under protest. Apparently the Superintendent took objection for the debit of interest in the cenvat credit and thereafter the appellants made the cash payment. Under these circumstances it has to be held that the payments made by the appellant were under protest only and therefore the time limit under Section 11B would not be applicable. At this stage, the Ld. A.R. submitted that the second payment made in July 2006 was not made under protest. It has to be noted that the original debit in the cenvat account was under protest and the second payment was made since, the department objected to debiting of interest in the cenvat account. Therefore the second payment has to be taken as part of the payment made originally and it cannot be said that there was no protest as regards the second payment when it was rectification of an error committed in debiting the interest amount in the cenvat account. Under these circumstances the whole amount paid by the appellant has to be treated as paid under protest. In view of the above position, the original adjudicating authority’s decision to allow the refund by way of credit in the cenvat account is correct and accordingly the impugned order is set aside and the original adjudicating authority’s order is upheld with consequential relief to the appellant.